Consolidating bilateral ties

Prime Minister Narendra Modi will undertake a two-day visit to the US from June 7. During the visit, Modi, will address a Joint Meeting of US Congress and hold talks with US President Barack Obama to review the progress made in key areas of defence, security and energy. President Obama is on the last leg of his tenure with less than eight months left. But he has grown more assertive in his last year taking a number of bold and innovative decisions. New Delhi also expects a more pro-active approach from Obama in imparting a strategic dimension to the India-US relations.

However, there are areas of convergence as also of divergence, and both the Indian PM and the US President will attempt to focus more on the areas of convergence where detailed follow-up actions have been taken in the last two years of Modi’s tenure. That way, major agreements might be concluded with respect to defence and nuclear power plants. Space cooperation is another area in which India is very interested and already some concrete moves have been made.

The major highlight of the June visit might be the conclusion of a deal for the setting up of nuclear power plants in India by the US company Westinghouse. It has been eight long years since the India-US civilian nuclear deal was signed in 2008 by the former Prime Minister Manmohan Singh and the former US President George Bush. Westinghouse and the Nuclear Power Corporation of India have finalised the details for the setting up of six nuclear plants in Andhra Pradesh. The US company has submitted all technical details and sources say that NPCIL has processed those for preparing the contract document. Both sides are anxious to ensure that the commercial deal is finally signed.

Westinghouse and NPCIL have negotiated to build six reactors in one go. Sources say that India has by now, ratified the Convention on Supplementary Compensation for Nuclear Damage (CSC), taking an important step in addressing matters related to nuclear liabilities. India has submitted its instrument of ratification for the CSC to the International Atomic Energy Agency (IAEA).

The Convention has come into force for India with effect from May 4 this year. India had launched the nuclear insurance pool in June last year with a total corpus of Rs. 1500 crore to provide coverage for operator’s  liability under the civil liability for nuclear damage act, 2010. It also provides for suppliers  special contingency to nuclear operators(buy back) policy for suppliers.

Space cooperation between India and USA is another major area of discussion. India is seeking American assistance in civil space collaboration and global space governance. There is a likelihood that Modi will be visiting NASA during this visit and some major announcement will be made about a joint collaboration in space. Indian scientists had earlier held discussions with their American counterparts on an arrangement for space situation awareness (SSA) – a programming for monitoring space environment and tracking potential hazards and security threats. Also, there have been discussions over formulating a bilateral mechanism to share satellites for maritime domain awareness (MDA) which has special importance to our maritime security.

Space security is an area in which Prime Minister Modi is highly interested. He has asked the Indian side to collaborate with American organisations to establish a mechanism which can take care of Indian interests. Indian officials have studied different facets of energy security, maritime security and space security. And in all three areas, PM is interested in seeking US technology without adversely affecting India’s national interests.

Strategic defence has also emerged as a very important area for the US as India provides American manufacturing companies vast opportunities to sell their equipment. The US by now has become the biggest defence equipment supplier to India surpassing Russia in a decade. From a meagre US$ 300 million in 2005, the US is now having defence orders worth US$ 14 billion. The US wants India also to be a part of its defence strategy in geopolitics. Amercian officials have been pressing India for long to ink three crucial defence agreements- including Logistics Support Agreement (LSA). Some clauses of these agreements are not favourable to Indian interests But there is pressure from the US side. Will Modi conclude these agreements during this visit?

The India-US trade relations continue to be the weakest link in the so-called strategic relationship. The US itself is relying on greater protectionism but it wants India to open its doors to the US MNCs without caring for the interests of the domestic companies. The US is not interested in India joining APEC and it wants India to sign the bilateral investment treaty (BIT) with the US first. India is not yet ready to sign the BIT on US terms but the pressure continues and unless the Modi government is firm on tackling the US on trade issues on equal footing, the Indian interests will suffer.

Prime Minister Narendra Modi will hold strategic discussions in his one to one meeting with President Obama about China. The US is trying to lobby India into joining a strategic tie-up aimed at encircling China, exploiting New Delhi's apprehensions about Beijing's recent policy manoeuvres. India must be very vigilant on this matter. India can deal with China on its own and need not depend on any support base from the US. 

Moreover, India should not be provoked by the US to meddle in the South China Sea and antagonise China. Rather India should focus its energy on strengthening its maritime presence in the Indian Ocean. The US foreign policy is in a transition stage. No one is sure about what the new US president will bring to the table next January. India has to be cautious in dealing with the US in the intervening period to protect its own interests. In this transition period in US politics, India needs to be cautious. Modi must exercise that caution in his deliberations with the outgoing US President.